Natural Gas as a Transportation Fuel

Natural Gas as a Transportation Fuel

Manitoba Hydro! Electric Utility 556,000 electric customers! Responsible for generation, transmission, distribution and retailing of electricity in Manitoba! 5,500 MW of generation, 13,000 km of transmission and 76,000 km of distribution! Gas Utility 272,000 natural gas customers! Responsible for procurement of natural gas and transportation! Distribution and retailing of natural gas in Manitoba! 9,700 km of distribution, no compression, contracted storage! Operate in a regulated environment with oversight from the Public Utilities Board of Manitoba, which approves all rates (electric and gas) and validates costs incurred by Manitoba Hydro for providing both energy and service to its Manitoba customers

Natural Gas Business! Manitoba Hydro does not profit from the sale of natural gas, commodity expenses are passed through at cost! Costs for transportation, distribution and retailing of natural gas are passed through to customers through our approved rates! High Volume Firm Natural Gas Rates! Basic Monthly Charge $1,221.42! Primary Gas Charge $0.1252 / cubic meter! Supplemental Gas Charge $0.1605 / cubic meter! Transportation to Manitoba $0.0049 / cubic meter! Distribution in Manitoba $0.0337 / cubic meter! Demand Transportation $0.4182 / cubic meter (peak)! Demand Distribution $0.1671 / cubic meter (peak)

Electric Business! The use of natural gas for transportation generally has an electric component (compression)! Use of electricity can be optimized to reduced energy costs for compression and handling of natural gas! One stop approach to obtaining both natural gas and electric service! General Service Large Electricity Rates! Basic Monthly Charge NA! Energy Charge $0.0339 / kwh! Demand Charge $7.72 / kva (peak)

Open for Business! Committed to serving transportation customers seeking natural gas as an option! Actively encourage potential customers to contact us at the early stages of the project.! Impact of natural gas and electric rates on facility design (including compression, storage, etc)! Manitoba Hydro can assist customers in making solid business decisions relevant to their project (design, procurement, power quality and cost).

Average Natural Gas Costs Per Unit Cost ($/m 3 ) 0.475 0.450 0.425 0.400 0.375 0.350 0.325 0.300 0.275 0.250 0.225 0.200 0.175 * Based on Billed Natural Gas Rate Schedule - Effective August 1, 2014. http://www.hydro.mb.ca/regulatory_affairs/energy_rates/natural_gas/billed_rate_schedule.pdf 0.150 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 Load Factor

Average Electricity Costs $0.300 $0.250 Avg Unit Cost ($/kwh) $0.200 $0.150 $0.100 $0.050 $0.000 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 Load Factor

U:lity Challenges! Infrastructure expansion and replacement is a growing concern and expense for Manitoba Hydro! Ensure that customer optimize their usage to reduce the average unit cost of energy (natural gas/electric)! Optimizing storage relative to peak consumption! Assessing compression needs (electric demand)! Timely notification of the project scale regarding electricity and natural gas requirements! Project scale impacts time and cost to service! Reasonable expectation of in- service dates upon receipt of information

Loca:on! Potential customers need to understand the importance of project location to the utility! Preferred service location (customer) may impact installation cost for both natural gas and electric services! Preferred service location for Manitoba Hydro due to available capacity on the electric and natural gas system

Emterra CNG Project

Installa:on

Future U6lity Involvement! Continue to play an active role in the procurement and distribution of natural gas for use in Manitoba! Internal discussions regarding the role of CNG and LNG in various applications is ongoing (economics/ demand)! Manitoba Hydro will continue to assess its involvement in the CNG/LNG market, both as a supplier and facilitator of CNG/LNG service! Potential opportunity outside the scope of our regulated utility business

Engaging Manitoba Hydro! Manitoba Hydro s Economic Development Group! Service requirements (utility interface)! Technical support (end- use expertise)! Project Confidentiality (if required)! Pre- Account Management (Major Accounts)! starting relationship on a positive note! address service requirements at an early stage! Customer Advocate within Manitoba Hydro

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